The Consumer Financial Protection Bureau proposed settlement with Think Finance, LLC, formerly known as Think Finance, Inc., and six subsidiaries which would resolve a 2017 lawsuit.
The agency accused the entities collectively of unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act. They allegedly collected loans illegally that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.
An amended complaint, filed in the U.S. District Court for the District of Montana in 2018, alleged that the Think Finance entities operated as a common enterprise affiliated with tribal lenders in the offering and collection of online installment loans and online lines of credit to consumers nationwide.
They made deceptive demands and illegally took money from consumers’ bank accounts for debts that consumers did not actually owe because the loans were either partially or completely void under the law of 17 states, the bureau alleged. It also alleged that the entities provided substantial assistance to two debt collection companies that were also engaged in the illegal collection of loans.
If entered by the court, the proposed stipulated final consent order would prohibit the entities from offering or collecting on loans to consumers in any of the 17 states if the loan violates state lending laws and assisting others in engaging in that conduct. It would also impose a $1 civil money penalty for each of the seven entities.
The proposed consent order is a component of the global resolution of the Think Finance Entities’ bankruptcy proceeding in the Bankruptcy Court for the Northern District of Texas, which includes settlements with the Pennsylvania Attorney General’s Office and private litigants in a nationwide consumer class action.
Consumer redress will be disbursed from a fund created as part of the global resolution, which is anticipated to have over $39 million for distribution to consumers and may increase over time as a result of ongoing, related litigation and settlements.